DELHI: McDonald's estranged India partner Vikram Bakshi has sold two prime retail properties and is in the process of selling a third one in Delhi's Connaught Place as he prepares for a prolonged and expensive legal battle with the US burger chain.
Bakshi has recently sold a 2,000 sq ft property where Apple has its store for over Rs 16-17 crore and a 2,700 sq ft property leased by McDonalds itself for close to Rs 19-20 crore. A third property, a 6,500 sq ft store that originally housed fast food chain Wimpy and was recently split into two to house Dunkin Donuts and Dominos, is in the process of being sold for around Rs 38-40 crore, a person close to the development said.
An official close to Bakshi said he is creating a war chest to fight his legal battle and arbitration with McDonald's in a London court.
"He (Bakshi) is collecting a large sum to take on his partner," the person said. "This is a large sum in itself but he is willing to put it on the line because the upside is huge, to the tune of Rs 250 crore, if he wins the arbitration," he added.
"What needs to be seen and understood is that the two properties are literally family jewels, what he had even before getting into a venture with McDonalds. His conviction is such that he needs to do what he must to keep himself financially in shape to see the battle through," this official said.
A lawyer who is aware of the dispute between McDonald's and Bakshi said arbitration in a foreign court is time consuming as well as expensive.
Bakshi and McDonald's have been entangled in a legal dispute since August 2013 after the company decided not to reappoint Bakshi as the managing director of the joint venture firm, Connaught Plaza Restaurant Pvt Ltd (CPRL). In a statement issued on August 30, McDonald's said:
"Vikram Bakshi has ceased to be the managing director of CPRL pursuant to expiration of Bakshi's term on July 17." Bakshi moved the Company Law Board (CLB) in September to seek his reinstatement as the MD of the company.
McDonalds claimed that the former MD's business interests outside of the joint venture were profiting from him being at the helm of the JV.
The US firm also alleged that funds had been diverted to Bakshi's other hospitality business, a claim the latter has contested. McDonald's, meanwhile, obtained a Delhi High Court order restraining Bakshi from selling his shares in the JV until CLB issues an interim order.
In December, the US fast food chain approached the London Court of International Arbitration (LCIA) for arbitration even though the matter was being heard at CLB.
CLB had been hearing arguments on whether McDonald's could refer the dispute with its Indian partner to LCIA for arbitration. Last week, Bakshi had proposed to the CLB that he is willing to buy McDonald's stake in Connaught Plaza Restaurant Private minus the brand.
Bakshi, known as a real estate man with properties worth crores in prime locations in Delhi and Noida, attracted the US company as an equal partner for India and many of his own properties are leased to it.